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Signal Hill City Council adopts ordinance requiring political groups to disclose contributions before elections

Sean Belk
Staff Writer

Any person or political organization looking to influence voters during municipal elections in Signal Hill will have to follow a new city ordinance that requires reporting campaign contributions to the city clerk within 24 hours of making the expenditure, among other conditions.
The Signal Hill City Council voted unanimously (5-0) at its Tuesday, March 4 meeting to adopt the ordinance amendment that applies to any person, organization, nonprofit or political action committee (PAC) that makes an independent expenditure of $100 or more in support of or in opposition to any measure or candidate 40 days prior to an election.
PACs and independent expenditure committees (IECs) are already required to disclose financial records with the Los Angeles County Registrar of Voters, however disclosure is required months after an election has passed, leaving the door open for such groups to influence elections anonymously before voters go to the polls.
City officials said that Signal Hill’s new requirements would provide more transparency and better inform voters during election cycles by mandating that such groups reveal their financial backers before an election.
“A code amendment requiring independent expenditure reports be filed with the city clerk will allow residents to have immediate access to this information,” said City Manager Ken Farfsing.
He pointed out that Supreme Court rulings protecting free speech under the 1st Amendment prohibit the City from limiting donations or expenditures by PACs or individuals.
Mayor Michael Noll first requested during a Council meeting last May that the City draft an ordinance amendment after he was targeted along with Vice Mayor Ed Wilson and former councilmember Ellen Ward in a flier campaign before the March 5 election. The Council officially requested that city staff draft an amendment on June 4, 2013.
Just weeks before last year’s March 5 election, three mailers from an organization known as Coalition for Clean Affordable Water were sent out to Signal Hill voters. The fliers, which city officials and residents have called “hit pieces,” attempted to unseat three incumbent councilmembers by claiming the elected city officials have squandered city funds.
The fliers, which also targeted Farfsing and City Attorney David Aleshire, contained allegations of corruption and compared Signal Hill to the City of Bell. One of the fliers stated, “Just like Bell, Signal Hill residents are being ripped-off!!”
At the time of the election, it was unknown who or what organization was behind the mailers, leading some residents to believe that the campaign was launched by candidates opposing the incumbent councilmembers, including Lori Woods, who ended up beating incumbent Ward for a seat on the Council.
However, the Signal Tribune first reported last August that the Coalition for Clean Affordable Water was financed and led by Robert Katherman, board president and director of the Water Replenishment District of Southern California (WRD), which has been in a longtime legal dispute against the City.
“The coalition was not transparent about its motives or financial supporters until it was legally required to months after the municipal election,” Farfsing said. “Information on the coalition’s donors should have been disclosed to voters prior to the election. Without this disclosure, residents were left with several misimpressions, including that councilmember Woods was involved in the coalition’s activities.”
Campaign-finance records obtained from the Los Angeles County Registrar of Voters show that $7,500 was spent during a six-month period prior to the election, with $2,300 being spent on the Signal Hill campaign alone.
Katherman’s own company, known as RGM, LLC, loaned $2,000 while several of WRD’s consultants, attorneys and lobbyists also contributed. Attorney Edward Casey donated $500, Casey’s law firm donated another $500, the law firm Harris & Associates donated $2,500, WRD’s political consultant Michael Gagan gave $500, WRD’s public relations firm Kindel & Rose donated $1,000 and WRD’s Sacramento lobbyist, Reeb Government Relations, LLC, gave another $500.
Signal Hill city officials and attorneys told the Signal Tribune during interviews that the campaign raises ethical questions and concerns of a “pay to play” atmosphere since WRD’s own consultants, who receive money from the agency for services, were the main contributors.
City officials raised questions of whether the campaign was funded in retaliation to an ongoing lawsuit brought by Signal Hill, Downey and Cerritos in which the cities allege that WRD illegally raised replenishment assessment rates without following state public-noticing and protest-hearing requirements under Proposition 218. Though a judge has ruled twice in favor of the cities, the courts have yet to make a final judgment on how much money, if any, the cities would receive in monetary damages.
Farfsing said city staff came up with the new campaign-finance ordinance after comparing similar ordinances already in place in other cities.
Signal Hill’s ordinance amendment adds two definitions to the city code.
The first definition refers to “express advocacy,” meaning “communications that advocate support or opposition of a clearly identified candidate or ballot measure.” The second definition applies to “independent expenditures,” meaning “any expenditure or donation of anything of value,” including the gratuitous rendition of services in connection with advocating or the opposition to local candidates and local measures.
Under the new ordinance, any person, organization, nonprofit or political action committee (PAC) that makes an independent expenditure of $100 or more within 40 days preceding an election is required to notify the city clerk within 24 hours of making the expenditure.
Notices must contain: the name of the candidate or measure supported or opposed by the expenditure; the date and amount spent; whether the candidate or measure was supported or opposed; description of the communication; the name and address of the person making the expenditure; and the name and address of the payee.
The city clerk is then required to post a copy of the notice on the City’s website within two days after receiving the notice. The person must also provide to the city clerk three copies of the communication funded by the expenditure.
The amendment also requires additional language be added to “broadcast or mass-mailing advertisements” that expressly advocates the election or defeat of any candidate, according to a staff report. For those advertisements, the responsible committee is required to provide names of the top two persons making the largest cumulative contributions.
Reporting independent expenditures is also required for content on websites, blogs, social-media platforms and online videos.
Though city staff had originally proposed the reporting requirement for independent expenditures of $500 or more, Vice Mayor Wilson requested the threshold be scaled back to $100 or more, to which the city attorney and Council agreed would be no problem.
“I would want to see the contributors of $100 or more, like in a regular campaign,” Wilson said. “If you want to oppose something, that’s fine, and that’s our process, but you should do it openly just like anybody else. If you support someone, you do it openly. Why don’t you want to oppose something openly?”
Councilmember Woods had initially cast the lone dissenting vote against drafting a new ordinance, stating that she was opposed to the expense of creating a new law that the City wouldn’t be able to enforce. She has since changed her mind and voted in favor of the new ordinance.
“I’ve come to value the fact that disclosure to the residents and the curiosity outweighs the ability of the City to enforce something, and it does provide an additional layer of transparency,” Woods said.
According to a staff report, any violation of the new ordinance will be enforced by the city attorney while violations of the Political Reform Act are enforced by the Fair Political Practices Commission. Additionally, city staff states that initial inquiry into online paperless filing is approximately $5,000 annually for software and support.

Other Council highlights

Photos by Sean Belk/Signal TribuneOn Tuesday, March 4 at the Signal Hill Council Chamber, “Fire Dragons” of the Fire Camp Greater Long Beach present Mayor Michael Noll and the City Council with a birthday cake, celebrating Camp Fire USA’s 104th anniversary.

Presentations After members of Camp Fire Greater Long Beach presented the Council with a birthday cake, Mayor Noll presented the group with a proclamation in recognition of Camp Fire USA’s 104th birthday. Noll also presented Lisa Marie Harris, volunteer of the American Red Cross, with a proclamation, recognizing March as “Red Cross Month.” A presentation by former Signal Hill Police Chief Don Pederson on the Taxpayers’ Right to Know and Vote initiative was postponed because of an emergency, according to Noll.

Lisa Marie Harris, volunteer for the American Red Cross, speaks to the audience after being presented with a proclamation by Mayor Michael Noll to recognize March as Red Cross Month during the Signal Hill City Council meeting on Tuesday, March 4.

Outsourcing city services The Council voted unanimously (5-0) to oppose state legislation that proposes to restrict outsourcing of municipal services. City officials state that Signal Hill practices “responsible outsourcing” to provide cost-effective and specialized services that “the City’s taxpayers cannot afford to provide with municipal employees,” according to a staff report. Earlier this year, Assemblymember Jimmy Gomez introduced HR 29, also known as the Taxpayer Empowerment Agenda, which is considered a “model that may help ensure transparency, accountability, shared prosperity and competition in the operation of public services and assets,” according to legislative language. However, Signal Hill city officials say the legislation is too broad and doesn’t explain how it would affect cities that rely on counties for public-safety services, such as the case with Signal Hill, which contracts with the Los Angeles County Fire Department. Other services that Signal Hill outsources are animal control, police-information management services, school crossing guards, park security, storm-water programs, police IT hardware maintenance, industrial waste inspection, street sweeping, grounds and median maintenance, and building inspection and plan checking. The Council directed Mayor Noll to draft a letter opposing HR 29.

Mid-year budget review The Council approved a budget adjustment for Fiscal Year 2013-14 as city staff presented its annual a mid-year budget review. According to a staff report, the City currently anticipates a $900,495 surplus in the General Fund for fiscal year 2013-14, which will bring the General Fund and all Reserve Funds to a total of $26.5 million. The Economic Uncertainties Fund balance is currently $5 million. This includes recommended carry-overs. City officials noted, however, that, despite the projected surplus, the City is facing several financial challenges, including rising employee-pension costs, the loss of redevelopment, unfunded capital improvements and increasing healthcare costs.

General Plan progress report The Council authorized city staff to submit the City’s annual progress report on the 2013 General Plan to the California Governor’s Office of Planning and Research and the Department of Housing and Community Development.
The next Signal Hill Council meeting is scheduled for Tuesday, March 18 at 7pm in the Council Chamber.